Austerity-hit Italy chooses new leader – Three-time former prime minister and media billionaire Silvio Berlusconi quit in disgrace in 2011, and is now on trial for allegedly paying for sex with an underage girl. He has pledged to refund an unpopular property tax with his own money.

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Austerity-hit Italy chooses new leader4 photos

Austerity-hit Italy chooses new leader – The surprise of the campaign has been ex-comedian Beppe Grillo, head of the populist anti-establishment Five Star Movement, which has won support among those critical of Mario Monti's austerity policies.

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Austerity-hit Italy chooses new leader4 photos

Austerity-hit Italy chooses new leader – The harsh budget cuts and austerity policies of current Prime Minister Mario Monti (L), shown with the outgoing Pope Benedict XVI, won him plaudits from European leaders, but were unpopular in Italy.

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With a contracting economy and GDP falling 0.9% in the fourth quarter of 2012; Italy is still grappling with the economic mess Silvio Berlusconi left in his wake before resigning in late 2011.

The media tycoon and owner of soccer club AC Milan -- who previously served three terms as prime minister -- was forced to step down amid an escalating eurozone debt crisis and personal legal battles.

Letta added: "The only way to avoid any risk to the Italian economy is a victory for the Democratic Party."

Italians will take to the voting stations this weekend to decide which candidate will lead a country, struggling to emerge from a financial crisis that has plagued the 17-nation eurozone for three years.

But Deborah Bergamini, a parliamentarian and member of Berlusconi's PDL party, is expecting a "surprise" result on February 25. She rejected Letta's assertion that a return for the 76-year-old Berlusconi would destabilize Italy's economy.

Speaking to CNN, Bergamini said: "Berlusconi can definitely win. We are gaining ground... financial markets don't care at all about single heads of governments."

A Bersani government is the true threat to Italy's economic recovery, according to Bergamini, as the Democratic Party could adopt hard-left policies that tax the middle class and punish big businesses.

"There are many similarities with Bersani and what is going on in France... we are very worried," she added.

Nicholas Spiro, managing director of Spiro Sovereign Strategy, told CNN that a year ago Italy's economy was "falling off a cliff" and the investment community is showing "complacency" over the prospect of a Berlusconi return.

Spiro says the embattled politician could do very well in the election due to the "huge" number of undecided Italian voters. He added: "The fact that he has put the center-right alliance in contention is reason enough to doubt the prospects for post-election stability."

The election outcome is crucial to the eurozone's austerity agenda and "it's going to be a damning verdict," says Spiro. Adding that if Berlusconi can form a government there will be an "almighty sell-off" in the bond markets.